A leaner M&C Saatchi reported improved profitability and a lift in like-for-like revenue for the half year to June.
Revenue grew 4% to £211.5 million, driven by growth in non-advertising specialisms, largely issues and media. Advertising was up 6%.
Operating profit jumped 40% to £17.1 million in the six months, driven by a global cost efficiency program, local cost actions and dropping loss making businesses.
Cost cutting is on track to deliver annualised savings of £10 million by the end of the current financial year. This follows £4.5 million of cuts in the June half on top of £3.9 million last financial year.
The global advertising group described September quarter trading as “solid” and underpinned confidence to deliver full year results in line with market expectations, despite continued market volatility, tougher comparators and further investment in talent expected in the second half.
The company earlier this year said pressure was easing on client marketing budgets pointing to an improving market backdrop.
M&C Saatch’s strategy is to build a more efficient, stronger and scalable platform, with senior regional leadership to drive regional-first go-to-market.
The company reported strong regional performances in the first half from the UK (+12.9%), Europe (+16.7%) and the Middle East (+47.6%).
However, conditions were “challenging” in Australia largely due to subdued consumer sentiment and the economy.
Zaid Al-Qassab, the newly appointed CEO, said he was “delighted” to present a “strong” set of results.
“Whilst preserving creativity at the heart of all we do, and leveraging the power of our global brand, we are creating a more agile, integrated, regional-first operating model which focuses on growth,” he said.
“My first impressions of the group are incredibly positive: from the diversity of the businesses, operating from twenty-three geographies, the breadth of our capabilities, and the fantastic global brand of M&C Saatchi, to the creative and talented minds delivering inspiring work and outstanding service to our clients. “We continue to make great progress in building a strong platform to deliver sustainable organic growth through our self-help initiatives and wider transformation.
“Our increasingly diversified revenue provides greater resilience against macro volatility, and our higher-margin businesses continue to be our highest growth contributors.
“Whilst there is always more to do, we are excited about the further potential we can unleash.
“Looking forward, despite continued volatility within our markets, we are confident that we are on track to deliver against market expectations for FY 2024, whilst noting the tougher second half comparators.
“We will continue to deliver on our cost saving program whilst also making strategic investments in the second half of the year to underpin our ambition of long-term sustainable growth and delivering strong returns for shareholders.”
Numbers for the half year to June 2024:
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